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DoD Panel Targets Junior Enlisted Money Woes

WASHINGTON, Oct. 28, 1999  When $20 is all you've got left after expenses at the end of the month, life is tough. Ask any E- 3 with a spouse and a couple of toddlers.

For many of the military's 613,000 E-1 to E-4 junior enlisted service members -- especially the 172,000 who are married -- making ends meet is a penny-pinching undertaking. Housing and moving costs, car payments, auto insurance and repair bills, plus child care fees leave many young military families financially strapped.

"We have people who are falling through the cracks," said DoD's Victor Vasquez. "We'd like to see what we can do to increase the discretionary income that families have." The new deputy assistant defense secretary for personnel support, families and education has proposed a variety of approaches to help fill the gap for the military's young families.

Junior enlisted paychecks only stretch so far. When the largest pay raise since 1981 goes into effect Jan. 1, an E- 1 fresh from basic training will earn $930.30 a month and an E-4 with two years' service will earn $1,312.80.

Pay table reforms scheduled for July will include further increases of up to 5.5 percent to 75 percent of the military's enlisted members and 53 percent of the officers. These will primarily affect mid-level career service members, but certain E-3s and E-4s will also see pay jumps.

Vasquez and military and civilian quality of life advocates met here in early October to discuss ways to ease financial pressures on junior enlisted service members. Their Junior Enlisted Financial Plan Meeting was the first step in a process that may ultimately involve several other federal agencies and organizations.

Starting this fall, Vasquez added, DoD officials plan to hold regional forums throughout the country to discuss junior enlisted service members' financial issues with installation commanders and other local military and civilian officials.

Tony Jurney, deputy director of the Pentagon's Quality of Life Office, said E-1s to E-4s make up about 55 percent of the enlisted force. In a 1997 RAND study, he said, about half the junior enlisted surveyed said they have occasional financial difficulties. Some said bill collectors have pressured them, others have pawned valuables, and still others said they have fallen behind in their rent or mortgage.

A number of factors contribute to these financial troubles, Jurney noted. Junior enlisted service members are young, aged 17 to 26. They tend to marry earlier and have children earlier than civilian counterparts. They tend to be inexperienced about financial matters and therefore fall easy prey to predatory businesses.

Frequent deployments, separation from extended families and frequent moves drain the resources of all military families, but especially junior ones, Jurney said. Junior enlisted generally move three times in the first 18 months of service. Moreover, when they move, they also lose spouse employment.

The fiscal 2000 Authorization Act approved the payment of temporary living expenses to enlisted service members moving to their first duty station. Previously, they were not entitled that to such payments.

"An E-1 to E-4 would typically spend almost $1,000 to move and would only be authorized a reimbursement of $250 to $300," Jurney continued. "They had to pay the rest out of their own pockets or go into debt."

The military offers a variety of family support programs including child development, youth and family centers, as well as spouse employment and family advocacy programs, but officials say even more needs to be done. Jurney appealed to the interagency and private industry panel members for input.

"We've identified areas we think we can change, with your help, that would assist service members and provide them with more discretionary income," he told the panelists. These areas include reducing the cost of financing, leasing and insuring automobiles; reducing out-of-pocket moving costs; improving financial training for service members and their spouses; and exploring the concept of housing cooperatives as a way to provide affordable housing.

"Since a second income is almost essential in any household, we want to improve spouse employment opportunities," Jurney said. Initiatives include training with private industry and the development of more educational opportunities.

Another initiative is the Portable Entrepreneur Program for spouses interested in self-employment. DoD Office of Family Policy and Small Business Association officials started pilot demonstrations in San Diego and in Norfolk, Va., two years ago and call them overwhelming successes.

DoD's quality of life advocates also want to put a spotlight on the unsavory off-base business practices. Some service members fall into debt dealing with high-interest check-cashing firms. Retired Navy Adm. Jerry Johnson of the Navy-Marine Corps Relief Society said he knew of cases where service members would write a $460 check to get $400 cash.

He said service members also pay astronomical interest on title loans and told of an E-6 who fell behind one month on his mortgage and took out a $1,700 title loan against a $6,000 car. That loan ended up costing $7,480 in interest over 20 months, Johnson said.

The military is working with the Federal Trade Commission's Consumer Protection Bureau to identify fraudulent business practices. Army and the Marine Corps law enforcement authorities are already online with Consumer Sentinel, the bureau's secure Web site listing complaints against businesses. The bureau is working to bring the Air Force, Navy and Coast Guard into the fold.

The Consumer Protection Bureau has a toll free hot line -- 877-FTC HELP -- for people to report fraud or other unsavory business practices. An Internet complaint form is also available at www.ftc.gov.

Federal participants at the Junior Enlisted Financial Plan meeting hailed from the Small Business Administration, U.S. Chamber of Commerce, the Federal Trade Commission's Consumer Protection Office, the Agriculture and Treasury departments. Civilian organizations represented included the Red Cross, YMCA, military associations and relief agencies, credit unions and the banking and insurance industries.